Published in Solutions Integrator by Joe Devlin Click here for list of articles
  April 15, 1998 Latest generation of multidimensional analytical software provides a great reason to revisit database clients
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Where there's OLTP, can OLAP be far behind? It shouldn't be. In fact, the latest generation of multidimensional analytical software is a great reason to revisit our database and data-warehouse clients. Here's why and how.

 

     

Good Things Come ln Analytical Packages

THERE'S A SEISMIC SHIFT shaking up the database market, and data warehousing is at the epicenter. According to the "Database Market Zoos" report issued last year by Forrester Research (Cambridge, MA), the insatiable demand for more and better corporate information is causing database managers at Fortune 1000 companies to rethink their buying strategies.

While relational databases and OLTP (online transaction processing) systems won't disappear any time soon, 77 percent of the database managers Forrester interviewed said their investments would shift dramatically by 1999, away from OLTP and its updates, inserts, and deletes and toward tools for understanding data, i.e., data warehousing.

Forrester predicts that the transaction database segment will settle into stable 6 percent growth. Data warehouses and their smaller scale cousins, datamarts, will go on a 40 percent annual growth tear, hitting near parity with the transaction database market by 2001.

The reason is simple: Data warehousing makes old data relevant to whole new categories of users. Ask an accounts payable system what the average turnaround time for payment of invoices was this year versus last year, broken out by invoice categories no way. But answering that type of query is a piece of cake for a data warehousing tool.

Data warehouses accumulate information that enables proactive decision making. For example, a data warehouse can not only track inventory but also provide tools to manage inventory more precisely. The system may be configured to forecast credit problems, for instance, so that a customer can act upon the problems early enough to resolve them more easily. Talk about a compelling sale.

"From an integrator's perspective, data warehousing is a wonderful business opportunity," agrees Joe Brown, product manager of data warehousing at Microsoft.

Then there's the inherent risk of delivering and supporting OLTP based applications. When an OLTP system goes down, customers get worked up. But when a decision support system goes off line for a while, it may be inconvenient, but it doesn't stop business the way losing order entry or accounts receivable does.

Most integrators have long lists of established clients with systems they've been happily using for years. Data warehousing tools can provide those customers with a whole new way to use all the data they've collected. It wasn't long ago that the se sorts of solutions were priced out of the reach of most middle market companies. But no more.

It's quite affordable now to setup separate systems to implement data warehousing. But while it's a great opportunity for integrators, the technology still has a rather steep learning curve.

Warehouse Not Required

By definition, a data warehouse is information that has been optimized so that complex, multifaceted data can be retrieved much more quickly than is feasible with the simple, indexed rows of data from relational databases. The first data warehouses relied on custom-written routines to organize data and present it back to users.

When that approach proved too expensive and unwieldy for most implementations, the  concept of departmental sized data warehouses a.k.a. datamarts arose. Datamarts target the activity of particular departments within an organization, are relatively inexpensive, are easy to sell, and can be implemented fairly quickly. More important, the people who use them are key business decision makers often those who approve budgets.

Integrators and ISVs have rushed to market with prepackaged datamarts designed to serve every conceivable industry. The newest wrinkle packaged analytical data warehouse tools provides nearly limitless opportunities for integrators, because such tools go almost anywhere.

Stick them on top of an existing data warehouse or datamart, and you get faster processing. But because many products include internal data cubes (mini data warehouses of their own), useful results are also made possible by simply grafting these tools onto clunky old relational databases and OLTP systems.

Packaged data warehouse analytical tools vary widely in price and capability.  The cheapest desktop systems cost in the hundreds of dollars; enterprise client/server products cost hundreds of thousands.

The tools have a variety of names, with multidimensional analysis tools, OLA P (online analytical processing), and ROLA P (relational OLAP) being the most widely used. Whatever the name, they all let customers perform complex queries on many different simultaneous vectors.

Microsoft will be entering the fray when it introduces its own OLAP server sometime next year. Expectations vary about the technical merits of the Microsoft offering, but everyone agrees that Microsoft's arrival in the field will fan the flames of a datawarehouse frenzy.

According to Mike Quimby, VAR partnership manager at MicroStrategy, a Vienna, VA-based OLAP tool vendor, data warehousing gives integrators a competitive advantage. Competition among integrators selling OLTP solutions is intense.

"Most integrators and ISVs who provide OLTP type solutions compete with four or five other companies with similar offerings. 0ur tools provide them with an easy way to add a new layer of value and provide competitive differentiation," says Quimby.

Some markets have caught on faster than others. Any integrator that approached a large retailer such ac Wall Mart and tried to sell a plain, vanilla OLTP system without a data warehousing element would be shown the door pretty quickly, Quimby says.

Other industries are following suit. In 1997 some integrators began to see the telecom, financial, and healthcare industries express serious interest in OLTP tools. Radiant Systems, for one, a 630 person integrator headquartered in Atlanta, was a data warehouse pioneer. The company recently began using MicroStrategy's OLAP software to provide better analysis for packaged applications it offers to the petroleum, convenience store, entertainment, foodservice, and automotive industries.

Scott Kingsfield, solutions director at Radiant, thinks the new OLAP software has helped his firm stay a cut above the rest. "Analysis tools haven't changed our basic approach, but they do provide a new component to our overall solution."

In fact, OLTP has become Radiant's principle lead into new customers. The technology speaks directly to the issues of greatest interest to CEOs, because the tools make companies more strategically effective, Kingsfield says. And the new tools let him go back to existing customers, to sell a whole new line of products that help get more value out of their existing IT investment.

Another category of warehouse tool currently being hyped is data miners. These tools provide automated routines that search through data organized in a warehouse, looking for patterns. "They can point you toward areas that you should be addressing," explains Paul Hill, vice president of strategic partners and marketing programs at Cognos Software in Burlington, MA.

But Hill and other experts warn that whereas analytical tools are already appropriate for a broad customer base, data miners are not. "Data mining is currently at the same stage that OLAP was five years ago," cautions Hill. "It's relatively undefined right now."

Demonstrate Solid ROI

How do you know if a client needs one of these newfangled data warehouse tools? Some integrators determine who among their customers needs to take copies of printed reports they receive and retype the report data into a spreadsheet. When you find that kind of activity on a large scale, you've found a prime candidate.

Once you've located good prospects, then it's Sales 101: Present a solution that clearly demonstrates a solid ROI, advises Kurt Waltenbaugh, director of enterprise decision support for Retek, an integrator and ISV in Minneapolis. Retek booked about $3o million in sales of million dollar plus OLTP systems for large retailers last year.

The solution, branded the Retek Data Warehouse, is an OLAP application that leverages MicroStrategy's toolset. The best documented example of ROI, according to Waltenbaugh, comes from a Retek customer in the UK, the Storehouse clothing chain.

"They went live last September and used our solution to adjust their decision making process during the holiday season," he reports. "The new system paid for itself in four months' time."

No doubt Storehouse is having a happy new year.

Joe Devlin is a principal of Armadillo Associates, a software integrator headquartered in Half Moon Bay, CA near California's Silicon Valley. You may contact him at Joe@armadillosoft.com

 
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